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Microsoft Corporation (NASDAQ:MSFT) has been in ongoing antitrust allegations with the European Union, and now the EU’s Competition Commissioner, Joaquin Almunia, is about to embark on the next step in a recent investigation and pursue what could be a pretty steep fine for the U.S. -based tech company.

The EU has been pursuing an inquiry since July regarding Microsoft Corporation (NASDAQ:MSFT) offering very limited options in Web browsers, primarily focusing on its proprietary Internet Explorer being pre-installed on Windows devices. Almunia announced recently that the investigation was moving to a formal process, and Microsoft may face a fine as high as 10 percent of the company’s worldwide revenue during the fiscal year that ended June 30. For Microsoft, that fine could be as high as $7.4 billion, which would be the steepest fine in EU history.

That may also take a bite out of investors’ portfolios, including billionaire hedge-fund manger David Einhorn of Greenlight Capital, who had $234 million of his portfolio invested in Microsoft Corporation (NASDAQ:MSFT) at the end of June. (You can see his top stocks here.)

The details of this investigation go back to a 2009 ruling where Microsoft Corporation (NASDAQ:MSFT) was ordered to provide Windows users a choice of Web browsers, and in July the EU opened an investigation into Microsoft violating the agreement. The commissioner, Almunia, said that formal charges were likely to be filed.

“The next step is to open a formal proceeding into the company’s breach of an agreement. We are working on this,” Almunia said in Warsaw. “It should not be a long investigation because the company itself explicitly recognized its breach of the agreement,” he said. In trying to mitigate the damage, Microsoft has blamed the breach on a technical “glitch.”

Microsoft Corporation (NASDAQ:MSFT) has already been fined more than 1 billion euros for violations going back more than a decade. And this new “glitch” could put a serious “glitch” in the company’s bottom line.